Simplified Home Office Deduction

Deducting the use of a home office has never been easier due to some recent changes by the IRS.

Starting with your 2013 tax return, if you’re eligible for a home office deduction, you can use a new simplified option that can save you a lot of time. It requires less paperwork and record-keeping.

Instead of basing the home office deduction on your actual expenses, this option allows most taxpayers to simply multiply the square footage of your office by a prescribed rate.

The new optional deduction is capped at $1500 based on $5 per square foot up to 300 square feet.

If you use this method, you cannot depreciate the portion of your home you used in your trade or business, but you can still deduct business expenses such as advertising, supplies, and wages paid to employees.

If you itemize, your deductible home-related expenses should be deducted in full on Form 1040 Schedule A. Other restrictions may apply.

For more details on the new optional deduction, visit


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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